House price hike in London Olympic zones

London City’s poorest areas have seen their house prices rise dramatically thanks to the Olympics 2012 to be staged here. Tower Hamlets, an East End borough, has seen prices jack up by an incredible 12,000 pounds in a month. This area has Britain’s most crowded dwellings. Likewise its neighbouring borough Newham, which includes Stratford, posted a hike of 3.1 per cent.

Property web site Rightmove said that the rise in house prices between September 11 and October 8 has been recorded at 0.5 per cent. It is the first time that the monthly prices have registered a rise since April. Rightmove’s commercial director, Miles Shipside, reacted surprisingly when he stated: “While price rises were to be expected, £12,000 a month is pretty exceptional”. He was of the view that the entire housing market was “on the turn”.

Translated into figures, according the Rightmove House Price Index, the period between Sept 11 and Oct 8 average asking prices rose from £195,407 to £196,348 compared with the month before. More than 100,000 new properties were added on to the market during this period.

Highest increase was seen in the detached houses market which registered a 2.2 per cent increase in asking prices compared to last year, while flats and apartments saw a surge of only 0.5 per cent in prices.

However, Rightmove did not see a return to boom conditions. It felt that such a situation needed a host of first time buyers, mortgage rates which are lower and more realistic pricing by sellers and their agents.

In London, in areas close to the venues where Olympic events would be held, average asking prices increased by 0.7 per cent in October when compared to September.

This study assumes significance for the fact that the housing markets are an important economic indicator in UK.